Consumer Behaviour

Why Indian Market is so different for Segmentation

1. There are large number of product categories/ no brands


2. There is only one segmentation price/quality


3. If we classify by income group by NCAER




1. Affluent


2. Upper Middle


3. Core Middle


4. Low Middle


5. Low Income


6. Below Poverty Line

Only 1,2 are buying and not middle class as most marketers say

4. Buying has not to do with income- but disposable income. Even that is misleading, as disposable income can be used in many ways


5. We have the lowest footfalls and conversion rates


6. Segments are influenced by religion ( Ram Vs. Krishna) and Cinema ( Amitabh vs. ShahRukh Khan)


7. India luxury brands are not always bought by richest (politicians). We have the phenomenon of rocketing- where you spend more money than the segmentation world defines.


8. We are deeply rooted in our customs and mores


9. Growth of HNI/ Black money

Shopping Segments for Women in India by KSA

See figure 1

Age wise Consumer Segment Hierarchy

8-12- Tech Babies- 32 million

20-25- Impatient Aspirs- “Getting There”- 16 million- Most important for brands

26-50- Balance Seekers- 41 million ( Here there should be two categories 25-40 - v. big- ”Arriving there” and 40-50 age groups. These are not dealt with properly.

51-60- Arrived Veterans- Not really arrived. Buy postal bonds etc.

Pitfalls of Segmentation

It is often said that segmentation leads to better marketing but poorly served customers.

1. Lot of companies segment them well- but targeting wrong


2. End of getting wrong segment- North Star Jackets- Positioned for kids/ Even adults bought them.


3. Customers will not read fine print


4. Very expensive- You make a segment/ only to lose it to some other company


5. Consumer segments are known by what they spend and not what they can spend

Positioning

Positioning is not what you do to a product, positioning is what you do the mind of the prospect- it leads to an intimacy with the product.

- Every day we are bombarded with so many messages

- Mind must rank and eliminate

- At a time there are only 7 brands at the top of the mind

Issues related to Positioning

Issue 1.

1. Perception leads to positioning

2. Motives leads to positioning

In fact in positioning perception is the driving force

a. Does difference in product attributes leads to positioning

Or

b. Positioning creates the difference in product attributes

Example in support of a.

Rolls Royce – at 60 miles an hour….

Example in support of b.

Marlboro- Macho image. People don’t buy cigrattes

For apparels usually imagery lead to positioning

For high involvement product (except cars) perception is more important and leads to positioning. For low involvement products it is product differentiation that leads to positioning.

Issue 2.

It’s very difficult to repositioning

- The expense outweigh the benefits

- Easy- If done in the early stage

- Difficult- It done at maturity stage

Issue 3.

A brand can be positioned against an entire category.

Winter care lotion- Moisturizer+ Cold Cream

Issue 4.

A brand can be positioned at different points of time eg. Milk maid condensed milk.

For apparels it is impossible. Eg. Allen Solly did well with “Friday Dressing” , but failed when introduced ‘Monday ..Tuesday…..dressing”

PERCEPTION

It Is defined as the process by which an individual selects, organizes and interprets stimuli into a meaningful and coherent picture of the world.

Before perception : there must be sensation which is immediate and direct response of the sensory organs to simple stimuli.

- The lowest level at which an individual can experience a sensation is called an absolute threshold.

- The minimal difference that can be detected between two stimuli (similar) is called the differential threshold.

Rule

Any –ve should be kept just below JND

Any +ve should be kept above JND

If higher than 2^nd JND and lower than 3^rd JND, then you waste money.

Subliminal perception

Dynamics of Perception

- Selection

- Organization

- Interpretation

Selection: It is the process of choosing a stimuli out of many.

Selection depends upon

- Nature of Stimulus- Contrast or lack of it.

- Expectations- a horror movie will “terrify” you

- Motives- A woman interested in a laptop sees more ads of it.

It will give rise to

1. Selective Exposure: Heavy smokers avoid articles that link smoking to cancer. Seek messages which are pleasant and avoid which are painful.

2. Selective Attention: Some people are more interested in price

3. Perceptual Defense: Screen all that is threatening

4. Perceptual Blocking: Enormous number of ads- customers simply “tune-out”

Perceptual Organisation

It is organization of stimuli as a unified whole. It is done on the basis of :

1. Figure and Ground: Make product the figure and rest the ground. People remember James Bond and forget Marlboro.

2. Grouping: Group tea with beautiful women

3. Closure: Incomplete tasks are better remembered than completed tasks (Zeigernik Effect)

Perceptual Interpretation

1. Perceived Quality: Consumers often judge the quality of a product on the basis of a variety of informational cues which they associate with the product. Some are intrinsic to the product such as specific product characteristics. Some are Extrinsic to the product such as :

a. Price quality relationship (Every one is looking for a bargain)

Figure 2

b. Store image ( salesman, return policy)

c. Manufacturer’s image ( Tata is perceived better than Modis even though Tatas have more cases pending than Modis)

2. Perceived Risk: The uncertainty a consumer faces when he cannot foresee the consequences of their product decisions.

It can be

- Functional- Product will not perform as expected

- Physical- Is it safe

- Financial- It is worth the cost

- Social- What if people laugh at me

- Psychological- Will I feel good

- Time- Does it waste my time

How customers handle Risk

1. Seek information


2. Be brand loyal


3. Select by brand image


4. rely on store image


5. buy most expensive


6. seek reassurance

see figure 3

ATTITUDE

An attitude is a learned predisposition to behave in a consistently favourable or unfavourable way with respect to a given object.

Here ‘object’- brand, company etc. etc.

‘Learned’- by experience, direct and vicarious, cognitive learning

‘predisposition’- might propel a customer towards a behaviour.

‘consistent’- relatively consistent with the behaviour they reflect- not necessarily permanent.

‘occur within a situation’- may want a particular brand of shampoo- but tight budget doesn’t allow.

Functions of attitude

1. Adjustment Function


2. Ego Defensive Function


3. value Expressive function


4. Knowledge function

Models of Attitude

1. Tri-component Model

a. Cognitive Component-Cognition- “knowledge and perceptions acquired about attitude object by experience”. FAB is cognition aspects.

b. Affective Component- Emotions and feelings usually evaluative in nature- says either favorable or unfavorable. Eg. Good to bad, pleasant to unpleasant.

c. Conative Component- Likelihood that a person behave in a situation eg. Intention to buy scale.

3. Multi-Attribute Model

I have a different attitude towards each attribute of a product. Total attitude is the sum of individual attitudes.

Attitude Change:

It can be done by

1. Change the basic motivational function




1. Ego defensive- “brand”


2. Value Expressive- “Fashion or fuddy-duddy”


3. Utilitarian Function- FAB


2. Change the importance of attributes in MA model- Add, delete, magnify, minify. Tooth decay > sparkling teeth.


3. Associate brand with event or group


4. Relating to conflicting attitude


5. Change belief about competition

Post Purchase dissonance

This occurs when the customer has an uneasy feeling about their prior beliefs or actions. Eg. A customer thinks ( after purchasing Zen)- ‘My mother said – Zen has less leg space’

He may

1. Either sell Zen


2. less leg space- also means car height is lower- makes driving stable


3. My mother always tortures me

How a marketer can handle PPD preemptively

1. Include message in Ad. Reinforce drive stability


2. offer stronger guarantees and warrantees


3. No. and efficiency of services


4. Provide detailed brouchers


5. Design affinity or relationship programs to reward good customers.

CULTURE

Modes of behavior/ beliefs of societies at large

Components of culture

- Distance – “German” “Brazil”

- Time

- History- Burra Sahib- Hat

- Beliefs- T-shirts, hair oil

- Relationship with universe- toothpaste for vegetarians

Thus culture

- Defines society

- Defines clothing/ food habits

- Linked to relationship with universe

- Linked to business negotiations

Culture specific Marketing

1. Geocentric- McDonalds plus Something


2. Ethnocentric


3. Polycentric- One for US, one for India.

Changes are least in geocentric and maximum in polycentric

OPINION LEADERS

- Category Specific

- Help diffuse categories over social strata

- Same social class position

- Greater exposure to mass media

Function- Trickle across the culture

Why people need them

- information about new product

- reduce perceived risk

- reduce search time

- need for approval

- subcultural factors

- tutoring

What Opinion Leaders needed by the Marketing Organisation

- Gain recognition

- Reduce PPD

- Seek Involvement

-Product

- self

- ménage

- others

Challenges for Companies

- How to identify

- How to reach

REFERENCE GROUPS

It is any person or group that serves as a comparison for an individual in the formation of either general or specific attitude.

RG

- Normative

o Influence general values

- Comparative

o Influence Specific Values

RG

- Contractual- face to face contact

- Aspirational- want to be a member of the ‘celebrity’

- Avoidance- does not hold, no face to face, group values

- Disclaiment

FACTORS THAT INFLUENCE RG

- Information and experience

- Credibility

- Conspicuousness of product

RG

- Celebrity

- Experts

- Common Man

Impact of Reference Groups

- Specific Brand awareness

- Relate with people

- Legitimatize decision

COMMUNICATION MODEL

Exchange of information, idea and values through a medium to a receiver. It can be two step or multistep.

Effect

- Determines CB

- Pervasive

- Serious Business

Vehicle

- personal – word of mouth

- commercial- Magazines ( fine print, passion value, specific target segment, literacy, not hot, very bad recency value) , Television ( Drama, Animate, nice looking, ads- passion , hear (house wife), jingle, huge mass reach, clutter, flicking, not a H/W media, no passion, not interactive) , Radio ( interactive, closure effect, no demonstration) Copy Approach ( Fear- insurance, Humor- People already know, agony- balm, abrasive- Onida, Sex, Audience Participation ( sit com)

Barriers

- Selective Exposure

- Post Purchase Dissonance

- Psychological Noise.